Monsanto says it still wants Syngenta; profit beats estimates
By Carey Gillam
(Reuters) - Monsanto Co (MON.N: Quote), the world's largest seed company, said on Wednesday it would still pursue an acquisition of Swiss rival Syngenta AG SYNN.VX, which has rebuffed talks about its $45 billion offer, even as it warned of market challenges ahead.
Shares in Monsanto fell more than 4 percent to $108 as investors absorbed news the company would likely break even at best in the fourth quarter, and the agrichemical giant said it was cutting costs amid a cautious outlook for 2016 and beyond.
The subdued outlook and lack of progress in Monsanto's pursuit of Syngenta offset news of the company's higher-than-expected profit in the third quarter.
"Expectations are being tempered," said Edward Jones analyst Matt Arnold.
Low commodity prices that translate to reduced plantings of specialty seeds, along with weakening foreign currencies, and pricing pressure on Monsanto's Roundup weedkiller from generic offerings were among the headwinds, said Arnold.
Monsanto said Wednesday that it was working to reduce its operating spending, potentially by $300 million to $500 million by the end of fiscal 2017.
Monsanto Chairman Hugh Grant also emphasized Wednesday that the company still hopes for a friendly deal to acquire Syngenta, but would look at other opportunities if a deal doesn't come together.
"If unsuccessful, this isn't something we're going to turn into an epic struggle," Grant said in a conference call with analysts. Continued...